$AAPL now up 3%+ at day’s highs as news of of Apple Pay confirmed and the pricing of the new iPhones hits. Mobile payments service will be called Apple Pay. Apple iPhone 6 costs $199-$399, 6 Plus $299-$499 with contract. iPhone 6, 6 Plus will include Secure Element chip to encrypt payment info for Apple.
Steady as she goes, and I think Apple has delivered enough to keep the momentum going into year-end and next year as the pent-up demand for these iPhones is absolutely monstrous.
I like to diversify amongst revolutionary stocks. We have water revolution plays like Calgon Carbon and Lindsay. We have long-held app revolution platform stocks like Google and Apple that are still full of upside potential. We’ve got solar, telecom, chips, and other sectors too. I personally own other asset classes and work to grow my income and entrepreneurial wealth. In the narrower scope of a single stock portfolio, we have some diversification even as we focus on revolutionary stocks.
Another way I like to create some diversification in the portfolio and to capture some outperformance over a shorter-term time frame is to find and invest in an old school tech stock when it’s gotten cheap enough and there’s a potential revolution coming right at the company despite itself. I’ve caught some great gains doing this in Microsoft in the $20s and more recently Intel in the low $20s as the mobile and app revolutions lifted all kinds of tech boats so found a couple that had been temporarily left behind.
All of which leads me to…wait for it…Sony. Yes, Sony.
As I wrote in my latest book, 25 Stocks for the Wearables Revolution:
“As recently as the 1990s, the Sony name conjured up thoughts of cutting edge technology and high quality products. Walkman is now the butt of jokes. As in, ‘you’re so young, you probably don’t even know what a Walkman is’. Sony now is trying to recapture some of those good times with new wearables like smartwatches and Personal 3D viewers. If they’d thought of it ten years ago, they might have been able to leverage the runaway success of the Sony Playstation to create their own operating system platform for mobile, TV, tablets and smartwatches, etc. Too late now, and maybe that’s best, because Sony is at its heart a hardware company, not a software company. I wouldn’t be surprised to see Sony displace Samsung as the go-to high quality Android gadget and device (including wearables) manufacturer. With market cap that’s equal to ¼ of revenue, if the company could ever return to some decent form of profitability, the stock could be a ten bagger. That’s a big if though.”
The company’s been through the ringer and has survived some rudderless times here. They’ve failed as smartphone vendors in the long lost joint venture with Ericsson and ever since. Sony computers aren’t the future either. But Sony’s actually got a long history of being a “wearable” company going back all the way to the Walkman, the world’s first mass market wearable if you think about it. Sony’s been so far unsuccessful in rolling out a mass market smartwatch, but they are getting closer to finding the right combination as the Android platform and the apps ecosystem built for it grows ever larger and easier to use.
Part of the upside valuation potential that most people cite for Netflix is its ability to generate long-term earnings off their sunk investments of in-house productions like House of Cards and Orange Is the New Black. Those “Netflix Emmys” are a big deal, supposedly. Don’t get me wrong, I’ve been a long-time Netflix bull, back as far as when the stock was in the $20s and I had the CEO on my Fox Business show. Here’s me quoted by Simon Constable in the WSJ back in 2011, saying: “Netflix has finally fulfilled its namesake” and “$NFLX will be hitting $1,000 within five to seven years.” I still believe that, but wouldn’t want to be buying it at all-time highs today. http://online.wsj.com/news/art…
Click on this link and surf around at the hidden value that is “Sony Pictures”. http://www.sonypictures.com/
In the Sony Pictures catalog, you’ll find new hits like The Black List or Masters of Sex plus Seinfeld, King of Queens and hundreds of other hit TV shows. Movies in the Sony Pictures catalog includes little flicks like The Equalizer with that guy Denzel Washington, Spiderman, Ghostbusters, and endless other movies.
I don’t think we can draw a real parallel between Netflix’s business model of becoming the de facto cable company of the Internet with Sony’s wearables, Playstation and Content-Is-King Sony Pictures businesses. But here’s the real kicker I’ll leave with you with for now. Netflix is worth $30 billion today. Sony is worth $20 billion. I expect we could see a triple in Sony over the next five years if they simply keep rolling out new Android wearables and figure out how to maximize the monetization of the content assets. Even more upside would be found if the company were to split into three or four companies so that the old TV and other Sony businesses that are on the decline would quit dragging on the stock.
To download a pdf copy of my 25 Stocks for the Wearables Revolution, click the link below.
To download a pdf copy of my 12 Stocks for the Robotics Revolution, click the link below.
To download a pdf copy of my 12 Stocks for the Drone Revolution, click the link below.